Maritime New Zealand says hydraulic oil has spilt from a large cargo ship which has struck a reef near the Tauranga Harbour this morning, however the vessel's fuel tanks are still intact.
The 236m cargo vessel Rena, which carries a Liberian flag, struck the Astrolabe Reef, north of Motiti Island, around 2.20am.
There are no reported injuries to the 25 crew on board.
Authorities this morning flew a helicopter over the site to see if the anything had leaked from the vessel.
A "light oil sheen" found on the surface has been identified as hydraulic oil, Maritime New Zealand says.
The vessel, which left Napier bound for Tauranga Port, is reportedly on a 10 degree list, but is stable on the reef.
Two of its cargo holds are flooded, and pumps are being used to extract the water.
"As a precautionary measure, fuel in tanks on the port side is being transferred to the starboard side," Maritime New Zealand said in a statement.
"The ship's captain is in discussion with the ship's owner and salvage experts to assess how best to move the ship off the reef - this is expected to take some time."
MNZ's Marine Pollution Response Service is mobilising its team of trained spill responders, as well as specialist equipment to the site.
Members of the National Oiled Wildlife Response Team are also on their way to Tauranga.
MNZ has also activated its Maritime Incident Response Team (MIRT), comprising technical maritime experts.
The team is monitoring the situation closely from Wellington and has a maritime safety inspector on board the vessel assessing the damage.
The Astrolabe Reef is about 4 nautical miles north of Motiti Island (about 12 nautical miles off the coast).
Bay of Plenty Times reporter Kiri Gillespie says the weather conditions in the harbour are hazy.
She says Maritime New Zealand vehicles are at the port and people are flocking to Omanu and Mount Maunganui Main Beach to try to see the vessel - but are being thwarted by the weather.
In August, the 22-year-old vessel was detained for a day in Freemantle, Western Australia, by the Australian Maritime Safety Authority after "serious deficiencies" were found on the ship.
The authority's report found the vessel had "not been maintained between surveys", the "hatchway cover securing arrangements defective" and cargo was not stowed and secured as stipulated in the cargo securing manual.
The vessel was released after these issues were addressed.